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- National midterm elections, bruising inflation, the possibility of a recession here in the fourth quarter?

We'll have to unpack that and find out.

I am Chris William and welcome again to the most widely watched and longest running program on Carolina business policy and public affairs seen each week across North and South Carolina.

In a moment we will unpack some of these very touchy issues for us here, and later on the CEO of data-driven company, Inmar Intelligence, helps us understand how inflation really is affecting all of us.

And we start right now.

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(music playing) On this edition of Carolina Business Review, Colin Campbell from the North Carolina Tribune, Carl Blackstone of the Columbia Chamber of Commerce, and special guest Spencer Baird, CEO of Inmar Intelligence.

(music continues playing) - Gentlemen, welcome to our show.

Boy we got a lot.

Fed aggressiveness when it comes to rising interest rates, we have student loan forgiveness, We have the ACC's, and I'll call it, the big move from Greensboro to Charlotte, even though it was well-telegraphed.

We have midterm elections.

So Carl, let me start with you.

Midterm elections.

Is it going to mean anything in the Palmetto State, or is it pretty much papered over?

What's going on?

- I think it's very much papered over.

I mean, it's fairly quiet.

Now there's a little bit of noise, but the numbers are the numbers in South Carolina.

So I don't see any significant change anywhere.

We got one election on the coast for a congressional seat that was changed back in June.

But other than that, it is a snoozer of election.

- (laughing) Would you say that about the gubernatorial race?

Does McMaster have firm grip on the Governor's Mansion?

- He's got a firm grip, I mean, they, he's been out in front the whole time.

He's got a war chest that he's been collecting for the last six years.

And so I don't see any change there at all.

In fact, it'll be a blip.

- What about The Old North State, Colin?

What do you think's gonna happen?

- Yeah, I think it's, you know, the political wins are such that for the US Senate race, Republican Ted Bud is probably favored to win even though the polling does look like it's gotten a little bit tighter in the last few weeks on that race.

What'll be interesting to see that the impact of sort of him not necessarily running to the middle.

You see Sherry Beasley, the Democrat, sort of distancing herself from Joe Biden and a lot of the national politics and trying to run to the center, Bud is sort of doing the opposite.

He's had a rally with Donald Trump in Wilmington.

He's been really out front of the abortion issue and really talking about, you know, strict abortion restrictions.

So it'll be interesting to see in the final weeks of that election if that makes this a more of a tight race where Beasley's got more of a shot, but certainly, you know, she's up against some pretty significant national headwinds.

The other races here that are worth watching, control of the state Supreme Court is gonna be a big issue.

Two seats are open.

That'll determine whether Republicans have a majority in our state Supreme Court or Democrats.

And that court has been taking up a ton of big issues like voter ID, redistricting, education funding, recently.

We also have control of the legislature at stake.

And it's unlikely that Democrats can take control of the entire legislature, but they're essentially playing defense, trying to avoid a veto-proof super-majority for Republicans, so that during the last few years of Governor Roy Cooper's term, he'll still be able to essentially have a say in policy and veto things he doesn't like.

If Republicans win a few more seats, that goes out the window.

Republicans do what they want in the state.

- Well, and it's interesting you frame it that way, at least for North Carolina.

And on Jones street, the idea that it's either gonna be complete iron-grip control by the Republicans, or mostly controlled by the Republicans, but there's no chance for Democrats to really, and I'm asking the question, Democrats don't have any chance in North Carolina beyond that?

- You know, they will tell you that there's a slight chance, but most of their talk is really, their messaging is really framed around playing defense.

They're saying let's protect the governor's veto, let's protect, you know, abortion rights from further restrictions, things like that.

You know, it's a better political map for Democrats because of some of the redistricting lawsuits that we've had, but still, it would almost take a blue-wave year, which, nationally, it doesn't look like we're gonna have for even the more favorable maps to generate a democratic majority and the legislature here.

- Carl, back in the summer in North Carolina, we know for sure we could not uncover this about South Carolina, but back in the summer was the first time in North Carolina history that the unaffiliated voters actually were more as a percentage of either Democrats or Republicans in South Carolina.

Do you get a sense that the rise of the unaffiliates is that much and how does that change the game?

Or does it?

- Well, South Carolina's such a different state than North Carolina.

I think we're solid red.

There are parts of the state that are actually going more independent or unidentified as either Republican or Democrat.

It's not gonna play out this election cycle.

Now, what will be interesting is the following election cycle will that make a difference?

But with here, Governor McMaster did a great job handling the COVID response and keeping business open.

So there's not a outcry for change here in the state.

He has done a fairly good job of managing.

The economy here has been strong.

So without some major force to change, nobody's gonna do it.

So I don't see the unidentified folks making a big play this election, but I think it's starting to seep in, especially along the coast.

- Just, very quickly, McMaster following Governor Haley, was maybe not the odds unfavored for a long-term leadership role in South Carolina?

Has that surprised you that he's risen to this task in most ways?

- I think absolutely.

I mean, if he wins this election, which fully expect him to do, he'll be the longest-serving governor in the history of our state.

And so I think he's managed well, he has, he's a good, solid thinker.

He's smart politician.

He takes calculated risks when necessary.

So I think his leadership's been pretty good.

- Yeah.

Colin, in North Carolina, and you all have covered, you've covered this in North Carolina Tribune, but the idea that there's this back and forth with the general assembly, but also the North Carolina Hospital Association around certificate of need and how they could use that as a bargaining chip to get Medicaid expansion as well.

So handicap the idea of how much we're gonna get Medicaid expansion, and will the CON ultimately go the way that everyone feels like it's gonna work enough for 'em?

- Yeah, so we had just in the last few weeks, the first, sort of, compromise offer from the hospital association for the state, making some, sort of, minor tweaks to the regulations governing, you know, who can open new mental health facilities, who can open new surgical centers around the state.

And that's sort of a concession to Senate Republican leadership that really wants to see those regulations loosened up.

The initial response from Senate Leader, Phil Berger was, you know, absolutely not.

We need to go further than that.

So I think, you know, you're gonna see over the next weeks and months some pretty serious negotiations around that issue.

And there's a hope that maybe by December at the earliest, next year potentially, there's some level of compromise on that to where you get Medicaid expansion to the state, and in exchange the hospitals give a little in terms of their willingness to open up these regulations and face, you know, stiffer competition without the regulatory landscape preventing some of these new facilities from opening.

- Yeah, that was a bit of a start-and-stop-again initiative around Medicaid expansion because many thought, many observers thought in North Carolina that was gonna happen by now.

Are you afraid that that same thing may happen with this CON Medicaid expansion debate?

- Yeah, I think that's the worry.

The leadership I talked to has all seemed pretty optimistic that this will get worked out, it's just a matter of time, but certainly we saw a lot more movement on this issue when Republican leadership sort of changed their position on this back in the spring and summer months.

And it's been kind of a stalemate up until recently and only in the last few weeks have we seen any sort of movement.

- Certificate of need is not lost in South Carolina, Carl.

I know there is a contingent of conservative Republicans that are pushing this and seem like they've got it pretty far down the road.

Is certificate of need gonna go away for hospitals?

- I tell you what, I was surprised last year that it didn't get across the finish line.

In fact, there were a couple different bills.

Some was a phase-in, one was a complete end of CON.

It'll be interesting to see what North Carolina, I think, does.

I think that'll add additional pressure to South Carolina, which we don't start, our general assembly doesn't come back until January.

So, Colin's point, we're gonna be paying attention because I think that'll have a big influence on what happens in January.

- We've got a couple minutes left.

Colin, I wanna come back to you on the idea that inflation has been certainly epic and headline driving now for a while, for months.

Do we really have the sense, and I promise this is gonna sound like a leading question, but do we understand how broad and how deep and how epic inflation is at this point from what you're hearing from across the state?

- You know, I think there's a recognition among leadership that, you know, we've got a problem.

The state budget that North Carolina passed a couple months ago is very much a, you know, pre-recession budget.

There was a lot of talk that they had all this extra, you know, surplus money in the bank and surely they could do tax cuts or something like that.

And they ultimately decided, let's pull back this year.

We need to, you know, wait this out and see what inflation does and whether we do tip into a recession.

I certainly think from the polling, we're seeing, looking ahead at the election, that really is on voter's minds.

You know, you hear a lot of talk about Trump.

You hear a lot of talk about abortion rights, but none of those move the needle nearly as much as inflation in the economy in voters' minds.

So I think, you know, among these, the average people who'll be going to polls in November, inflation is still absolutely by far the number one issue in North Carolina.

- Inmar Intelligence is a technology and data science company that helps uncover and understand consumer behavior.

That is a broad description.

Joining us now is the interim CEO of that, Spencer Baird, who spent some time extensively, actually, at places like Ahold Delhaize, Kellogg, Dannon, HJ Heinz.

He is now at the top of the pyramid up in Forsyth-based Inmar Intelligence.

Spencer, thanks and welcome to the program.

Congratulations by the way.

- Thank you Chris, good to be here.

- Let's unpack this idea of what Inmar does.

And I mean, specifically around this idea that has been dominating headlines, and, in fact, people's lives.

Inflation.

It's pretty epic, and that's probably an understatement.

Spencer, help us understand the behavior now that is being driven by that historically-high inflation that you see through the data.

- Yeah Chris, and just to paint the picture real quick.

So Inmar today is a platform business that supports the exchange of value to shoppers all across the United States, 109 million shoppers to be specific.

So we have a really good, real-time read on all things inflation, all things behaviorally that's changing because of inflation.

So, glad to be here and talk about this topic.

We're seeing right now, you know, in the recent surveys cast, 96% of shoppers mentioning that coming back and saying that there's concern about inflation, no surprise.

58% of shoppers saying very concerned, so almost 6 out of 10.

You want to get to the behavioral side of things, this is what we're seeing.

87% of those surveyed announced to us in the survey that they're changing their behavior at the shelf as a result of the inflation.

So 73% of the time that's because there's a lower price available.

I'm gonna switch brands.

58% of the time it's because of availability problems.

Meaning the product's not on shelf that I'm looking for.

And then 33% of the time, good for Inmar, that they're looking for a coupon and that's, in part, the business that we're in.

So we're seeing a lot of change as a result of this.

Question I frequently get is, what's the end here?

Are we at a tipping point?

And I'll tell you that we're starting to see signals in our data that things are starting to plateau.

Good news.

I think the more important question at a time like this is, is this the new norm?

Is this the new waterline?

Or will we see retraction?

Will we see this thing come down?

I will tell you that my belief is that you'll see some reset.

You will see this come back down because as retailers continue to compete for loyalty with shoppers based on everyday price, they're starting to get a lot more crafty with the way they're going about that through a combination of value factors, coupons included.

So it's a wild show right now.

We are seeing a plateau, good news, but the behavior change is evident both in our surveys and also in the sales data that we're looking at on a consistent basis.

- Spencer, does this behavior change, is it as broad as, I'm just not gonna go to Publix, or BI-LO, or Piggly Wiggly, or Harris Teeter, or Take Your Pick, or any Kroger, or I'm gonna go to Aldi.

I'm gonna go to Lidl.

I mean, are we seeing that type of DNA change?

- We are, we're starting to see a lot of shifting occurring.

So people announcing through survey work that almost 6 out of 10 of them are willing to go to a different shop now, to the point that you were making, based off of the inflationary environment.

Two is 39% of the shoppers surveyed said that they were shopping less frequently, or they're buying fewer units every time they shop.

And we see those signals in the actual sales data as well.

So the answer to your question is, yes, we are seeing a lot of shifting that's occurring.

So the battle for retailers in this always-on war for loyalty is coming down to, on a lot of levels, price and the way they exchange value with their shoppers.

I'll tell you, our largest customer today, Chris, that we work with really, really large, second largest grocer in the United States, they just announced in their Q2 earnings that they put a billion dollars back, believe it or not, a billion dollars back in their shopper's wallets through the partnership with us.

We're very proud of that.

We're behind the scenes, don't take credit for it, but through a combination of our sales team, that's bringing more content, more value and deals and what those guys are doing to bring more value through their partnerships with CPGs.

Think about this, a billion dollars in one quarter.

Last year with that retailer, we did 2.3 billion dollars in total.

So it is, that's a really big step up.

And they are doing such a great job of really staying on that mission, hardcore, to create as much value on the things people buy at the right times of the year.

And it's paying off for them.

Their stock price is up 15, 16% year to date, as opposed to everybody else, which is challenged.

So yeah.

- Well, yeah, I would say that is surprising.

Actually, I'm gonna bring our panelists in.

Colin, you wanna lead off?

- Yeah.

And if you could tell us a little more, actually, you know, how your company goes about collecting this data.

When I go to the store and I scan my loyalty card, you know, where does that information go?

And how do you use it to the benefit of the companies that you work with?

- Yeah, it's a good question.

So the headline on Inmar and our purpose is we're in business to make other businesses smarter so that they can change your life.

And so in doing so, our job, frankly, starts with the collection of all that data, the cleansing of the data.

'Cause oftentimes it's not clean.

Assigning the right taxonomy to that data, and then putting it into platforms that allow us to personalize the deals that are most relevant to you when you come to the store the next time.

So there's a lot of myths out there about what happens with that data.

Is it sold off, you know, are there privacy concerns?

I'll tell you, the mission that we're on in support of our customers is to make sure, in their closed walls, that they're able to present more value on the right stuff at the right time to you, so that you become more loyal to their business.

And so it's really pro-shopper, pro-consumer.

And we're proud to be in that business because, A, it's very complicated to do all that.

And that can differentiate us with a lot of different retailers across the country.

But for you, it's a great experience or greater experience.

- Carl?

- Hey, thanks so much, Spencer.

Another one of your platforms I was interested to hear about is the student athlete influencer, which really is around the name, image and likeness programs at colleges.

Can you comment on that?

- I can, yeah.

So we purchased, Inmar purchased, a social influencer company called Collective Bias a few years back.

It was one of the 20 that we've made over the last 10 years.

So we've been active to say the least.

And one of the things when we saw the NIL rules starting to be put in place, which all of us have different opinions on, of course, is, as fans, we step back and said, how can we use our platform that's just filled with influencers today that are commenting on products and liking things and having big followers care about the same stuff?

We ask, how can we actually support athletes and turn them into influencers?

And that's precisely what we've done.

So as a part of the NIL rules that have now been put in place, we're actually working with universities to turn athletes into influencers so that they can advocate for certain products and start to influence different groups or different audiences that would follow them.

It's pretty wild what's happening there as well.

There's just a lot of change.

That's kind of the headline of all these things we're talking about.

So yeah, we found a way to actually take that platform and support the athletes.

And for that, we're very excited and we're just getting started.

We think there's a big, big path ahead for us.

- Great, thank you.

- What does NIL stand for?

- Name, Image and Likeness.

- Okay.

Let's come to fourth quarter retail sales.

I mean, it's bearing down, I'm sure you're trying to look around a corner around this.

Any idea what's gonna happen this quarter during the holiday season?

- You know, we're forecasting for a solid fourth quarter.

You know, people are starting to get out more.

We're seeing a lot of signals, but at the same time you've got the inflationary pressures and you've got supply chain issues, both.

So we've got a moderate outlook on Q4.

Our crystal ball is probably as good as yours.

Honestly, this is just a look ahead and considering different factors.

But yeah, we think we'll see a solid Q4.

- You think the consumer still has enough powder dry to continue to spend like that?

- I think there's gonna be some real challenges ahead.

I really do.

I think you look at the labor environment today, which is very favorable.

There's a likelihood that that could change.

And so at that time, I think you're looking at a lot of conflict between the inflationary challenges, potentially unemployment that's gonna continue to creep, or will creep up.

And I think you're gonna see a lot of pressure on consumers, for sure.

- [Chris] Okay, All right.

Colin?

- I was curious to talk a little about the, sort of the future of the office work environment since you guys are a data analytics and tech company, but you're based in Winston-Salem, which is not really a city that we necessarily associate with that industry.

What does it look like for you in terms of remote work?

And, you know, are smaller city is gonna be more frequently hosting, you know, corporate headquarters like yours?

- We, you know, it's a great question.

And I was just talking with another CEO last night over dinner about this very topic.

And he's pretty heavy with tech and data and such as well.

So it was a decent comparison point in the conversation.

We started our exercise void of anything to do with where people work.

And we just got really focused on the work itself.

What is gonna have to be true about our work product and the way it evolves over time in order for us to continue to sustain the growth that we've been fortunate to have over the years?

And we decided within that conversation, and as we went through that kind of inventory checklist, that one of the things that's gonna have to be true is that this is gonna have to be a special place to work.

And we're really struggling to make it special when humans are not with other humans, at least part of the time.

So we've taken the stance, so we're gonna carry on with a hybrid approach, but we're gonna be intentional about bringing people back together at moments that matter.

And that is frankly universal.

It doesn't matter if you're an engineer, it doesn't matter if you're a data scientist, it doesn't matter if you are, you know, playing a different role in the organization.

So we see these screens as a competitive threat to us, just from the standpoint that it erodes cultural uniqueness.

And we believe that cultural uniqueness is gonna have to be a key element of our success going forward.

So that's how we're gonna start to approach it.

We always announce though, and you probably hear this from other CEOs, that we have firm beliefs that are loosely held, (all laughing) meaning they're always under construction.

And so we're gonna take steps in this direction.

We're gonna learn, we're gonna go left, we're gonna go right, we're gonna pivot our way.

It's not gonna be a smooth northeastern path for us.

We don't expect it to be.

And so we're gonna learn our way through it.

but a big challenge this is for sure.

And you guys are seeing signals of this, Chris, in the unemployment data, or sorry, the retention data that's coming through the system today.

We're sitting today at about an- our forecast for the year is 18% turnover and we've actually seen improvements throughout the year.

So that's down.

Our forecast is actually improved and it's frankly helping us, it's making us sharpen our game.

- Where was it 12 months ago for you, For Inmar?

- 12 months ago we were forecasting that we would be at 21%.

- [Chris] Okay.

- So yeah, we've seen some improvement.

- [Chris] Yeah.

Carl?

- Yeah, so 42 years of your company being in existence in Winston-Salem, kind of piggybacking off Colin, I mean, what are the strengths and what are the weakness of being in a mid-major city?

I mean, Winston-Salem, a beautiful place, great schools.

What challenges do you have or what are the benefits of being in, headquartered in a mid-market?

- It's a good question.

And I'll tell you, I can comment on this pretty credibly.

I've moved from Chicago recently with the family during the pandemic.

And so I'm putting a fresh lens on this.

I'll tell you that the size is no indication, in my mind, of the potential here.

And what I mean by that is the quality of the schools around us, therefore the talent that's available for us, to usher us into the next generation, is, I think pretty much unmatched from what I've seen.

I mean, it's phenomenal.

So while, maybe, yeah, mid-market, just in terms of size, we look at the talent base as, really, the best indicator of the quality of the area.

And we see it as a major, major strength.

Challenge would be, naturally, that we're on the far coast, We're not in the center.

And, you know, we're battling with a lot of technology companies that are on the west coast.

And west coast, you guys know this, like, they pay their wages way different.

And now with work from anywhere, work from home, work on your own time, we're now competing with offers on the west coast where people can stay here on the east coast and make west coast wage.

So that would be a, you know, I would consider that to be a challenge for us, but, you know, we believe that we're just scratching the surface in terms of tapping the universities and all the talent and all the richness in these schools.

And so we're certainly not, we're not worried about the talent base here.

We love being at Winston and you're gonna see us do more and more things here innovatively.

David started that through the years and I'm gonna carry that forward.

It's a major competitive advantage.

- Spencer, we literally have about a minute left and I wanna come back to the, not insurmountable, but clearly, these challenges around building a culture and you can't answer this in a minute, building a culture, but also making sure that your team is productive and together.

How do you do that?

- So at the root, molecular level of culture is the word empowerment.

It's my belief and our belief that highly-empowered groups of people create amazing culture.

It's rarely talked about.

And three things have to be true for people to be empowered.

One is they have to be clear on the work that needs to get done.

Two is, especially with the generation that's coming through, now, they have to have some say in that.

And three is they've gotta have leaders that work around the clock to get them the things they need to deliver on what's expected.

So when you think about that whole formula around empowerment, it's a great, kind of, path to keep your eyes set on.

Because the further down that path we get in success, the greater the culture.

And that's how we're attacking it.

So embedded in all that is the work that needs to be done.

And it gets back to the question that you ask.

The more we focus there and give constant, always-on coaching, the more special we can be to more people.

And that's obviously the game that we're in.

You know, running a big, you know, almost billion dollar business today.

- I'm sorry, sir.

In about 15 seconds, do you feel like your productivity is where you want it to be?

- I do, yes, but, I'll tell you, that there are plenty of ways that we can improve upon that.

So I'm happy with where we are today, productivity wise, but there's room to grow.

- Okay.

All right, Spencer, welcome to the program.

Welcome to the Carolinas.

I think you probably made a good call coming from Chicago-land.

- (laughs) We do too, we do too.

- I bet.

Well, congratulations.

Please come back.

Our best at David Mounts and your team up there.

And Carl, thank you.

Colin, good to see you.

Happy weekend everyone, thank you for watching our program.

Until next week, I'm Chris William.

goodnight.

- [Narrator] Major funding for Carolina Business Review provided by Highpoint University, Martin Marietta, Colonial Life, The Duke Endowment, Sonoco, BlueCross BlueShield of South Carolina, and by viewers like you.

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